According
to the report, for every 100 extremely low-income households in
Illinois, there are only 28 available and affordable rental homes. In
Illinois, a family of four is considered extremely low-income if their
annual income is less than or at $21,650, which is 30 percent of the area median
income.

Extremely low-income renters typically spend more than half their income on rent, according to researchers.

“When
you are paying 60 or 70 percent of your income toward your housing
costs, there’s not much money left for the other necessities of life,
such as food, medical costs or investing in your education,” said Bob
Palmer, policy director for the statewide housing coalition, Housing
Action Illinois.

“In the richest country in the world people
shouldn’t have to make choices between paying for housing or paying for
food or healthcare,” he said.

One out of four renters nationwide
can be considered extremely low-income, and since 2008, the number of
people renting homes has increased by almost two million. Yet, as demand
increases for rental homes, prices also increase; making it
significantly more difficult for extremely low-income renters to find an affordable home, let alone reach
economic prosperity.

There are 425,000 extremely low-income
renters in Illinois, but only 119,000 rental units are affordable and
available to that population, according to the report. With a shortage of more than 300,000
units, Illinois was one of 13 states with less than the national
average of 30 affordable and available units per 100 extremely
low-income households.

In the Chicagoland area, there were close to 1.2 million rental households in 2011, and 28 percent (320,000)
were extremely low-income. With 129,000 total affordable and available units to that demographic, there were just 25 units for every 100 extremely low-income households
in the Chicago metropolitan area.

“We know that incomes have been
dropping but rental markets have continued to go up because so many
people have moved from home ownership to renting following the housing
crisis of 2008,” said Megan Bolton, research director for the National
Low Income Housing Coalition (NLIHC). “There’s this tightening of the
rental market which drives cost up, so for the lowest income renters
it’s becoming increasingly difficult to afford rent.”

According to Bolton, states with big metro areas with tight rental markets tend to have less affordable housing than others.

“One
of the greatest risks for homelessness is when you’re spending a huge
portion of your income on housing, and that’s what so many of these
families who are in unaffordable housing are doing,” she said.

The report suggests that one solution to the affordable housing crisis for extremely low-income renters is federal investment in the National Housing Trust Fund.

Created
by Congress as a provision of the Housing and Economic Recovery Act of
2008, but never funded as a result of the recession, the National
Housing Trust Fund would provide subsidies and incentives to preserve,
rehabilitate and build housing for extremely low-income renters.

The report calls for funding from the National Housing Trust Fund through modifications to the mortgage interest deduction.

“Converting
the current tax deduction to a 15 percent non-refundable tax credit and
reducing the size of a mortgage eligible for a tax break from $1 million
to $500,000 would save the federal government almost $200 billion over
10 years,” the report reads.

U.S. Rep. Keith Ellison (D, MN-5) introduced a version of the NLIHC’s proposal to modify the mortgage interest deduction last year. Called the “Common Sense Housing Investment Act of 2012”, HR 6677, it
was referred to the House Committee on Ways and Means in December, where it died.

The bill would have converted the mortgage interest
deduction to a 20 percent tax credit, capped the maximum mortgage to
receive a tax break at $500,000 and directed the savings to the National
Housing Trust Fund.

Bob Palmer, of Housing Action Illinois, said Ellison plans on reintroducing the bill this year.

“We
are in a climate where policymakers don’t want to spend money on new
programs,” said Bolton. “We really feel like this proposal is the way to
go because this would be a dedicated revenue source. We need to build
units and preserve units that are affordable to the lowest income
Americans.”

Public figures

Level of gov't

Comments

Good luck getting any republicans to go along with a program that affects their constituency pocket books

George Bundas

3:14am

Wed Mar 13

"We need to build units and preserve units that are affordable to the lowest income Americans." (Megan Bolton, Research Director, National Low Income Housing Coalition).

The question is: Why is the market rejecting the product (the home) that we have on the housing market?

In 2008 before the financial system crashed the product that we have on the housing market failed and continues to fail. There are two ways to fix this problem:

1. By conducting research and fixing this product to be safe, affordable, energy efficient and to be accepted by the market = a free market capitalist solution, or

2. By regulating the bankers and keeping this product exactly how it is = a populist socialist solution.

How much money has the Obama administration spent to conduct research in the home construction industry in order to fix this product? If the Obama administration conducted research what are the results and where are the new projects? In a capitalist system the government's job is to conduct research and to create conditions to attract capital and investors. In a socialist system the government became the investor.